Uber as Infrastructure
After reading through Uber’s S-1 ahead of their upcoming IPO I was astounded by the scope of their potential impact. Their total addressable market is a large chunk of global GDP and if they succeed, even partially, their software is going to power how cities work.
Many of the headlines from the business press revolved around their annual losses, operating costs, and CEO compensation. While that clickbait can draw shares and comment on social media, the interesting data is how Uber is changing the way cities behave and how people in those cities live. Uber has shrunk cities to make every corner more accessible and is even effecting behavioral change. For instance, 16-year-olds are delaying their driver’s licenses because Uber (and Lyft) provide reliable, cost-efficient solutions. Why drive when you can be driven with the press of a button without having to buy a car and pay for the cost associated with it?
Another notable change is how small and large food companies alike are adjusting their strategies to fit within the growing demand for on-demand delivery. 10% of McDonald’s drive-through business was a result of food delivery app like Uber Eats, Postmates, etc. Grocery stores are redesigning their checkout flows to reduce friction for food delivery employees. The writing is on the wall. A big change is coming.
When looking at Uber it is important to not just see taxis but what those cars could become – the future of local infrastructure and last-mile commerce. They are building a distributed US Postal Service for your city, and every city for that matter. They have done an amazing job at unleashing pent up supply (idle cars) and it will be even more exciting to watch as a consumer how that evolves as self-driving technology becomes widely available.
If Uber is successful our cities will look very differently 10 years from now. There are obvious benefits, but it will be interesting to watch 2nd order consequences in employment, city planning, and business design. Business opportunities will arise for those paying attention to the tides.